Level 3 Chief: All Partners Now on Same Contracts

By Khali Henderson Comments
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**Editor's Note: Click here for a list of recent channel-program changes you should know.**

After months of prolonged negotiations, all Level 3 Communications indirect sales partners are now on the same contracts.

The long-awaited plan to normalize indirect sales partners' contracts following the fall 2011 merger with Global Crossing was rolled out in January 2013 but delayed by partner protests and complicated by the resignation of channel chief Michael Jerich in May.

Level 3 Channel Chief Garrett GeeAn initial March 29 deadline for partners to sign the new agreements came and went, as did an extension. But, Level 3's new channel chief, Garrett Gee, who was named to the post in late June, told Channel Partners in mid-December that the carrier had collected outstanding signatures on the new paperwork within the prior 30 days.

"We have successfully signed all of the agents that had indicated they were going to sign with Level 3," Gee said. That's not counting about 20 percent of the agents with direct agreements who have opted to roll their bases under a master agency, he noted.

"What we did was eliminate those parties from the negotiation process because they were essentially sitting on the bench, waiting for us to come to terms with the rest of the partners, i.e. master agents, so they could move their bases," Gee said.

The consolidated Level 3 channel partner program and associated agreements institutes a new tiered structure – Elite, Premier and Authorized – that defines both revenue minimums and sales quotas associated with levels of support, as well as additional benefits like dedicated account teams and MDF.

Partners' complaints generally centered around aggressive sales commitments. This likely was among the reasons that one in five partners decided to assign their revenue to a master agency. Gee said others decided to sign into a lower tier despite qualifying for a higher one based on their revenue.

Another issue, particularly for Global Crossing partners, was a reduction in commissions.

"There was a variance between Global Crossing and Level 3 in the way that we paid. There is no disguising that," Gee admitted, noting that third-party consultants were brought in to benchmark partner compensation for the new program. "Based on the tiers that were developed, there may be some partners that have more favorable terms with regard to percentages and there may be some partners that had less favorable terms."

Despite the prolonged negotiation process, Gee said Level 3 was able to create consistent contracts across its partner base.

"One of the goals coming out of the integration of the two companies was that we had a bunch of different paper and we wanted to consolidate it into something that was fair across the board," Gee said.

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